In the fight against inflation
US is considering scrapping Trump’s tariffs on China
4/22/2022 10:34 p.m
The trade war between the US and China was one of the major issues during Donald Trump’s tenure as US President. In the meantime, the perception of the greatest threats has shifted. One of them is high inflation. The US government is considering scrapping Trump’s tariffs on China.
In order to combat the high inflation rate in the USA, the government says it is also examining the abolition of the punitive tariffs on imports from China introduced under then-President Donald Trump. “That’s something we’re looking at,” Treasury Secretary Janet Yellen told Bloomberg TV. The government is doing everything in its power to lower inflation. This also includes a “careful” review of the trade strategy towards China. It is also appropriate to review the tariffs because this would have “some desirable effects” in terms of inflation, Yellen said.
Trump imposed the first punitive tariffs on Chinese imports in 2018, starting a trade war between the world’s two largest economies. He wanted to reduce the high US trade deficit with China and accused Beijing of unfair trading methods. Just one year later, almost all imports from China, worth more than 500 billion US dollars at the time, were subject to punitive tariffs. Beijing also responded with new taxes on US imports.
Trade balance changed only slightly
Many experts argue that the tariffs have been passed on to prices by exporters, making many Chinese goods more expensive for US consumers. The trade balance of the two economic giants has changed only slightly as a result of the punitive tariffs: in 2020, for example, China exported goods and services worth 450 billion dollars to the United States, US exports to China amounted to around 165 billion US dollars.
US President Biden described the fight against the high inflation rate as his “top priority” at the beginning of March given the inflation rate of 7.5 percent at the time. Although the US economy is booming and the unemployment rate is low, many voters are dissatisfied with the rising prices – and partly blame the problem on the government.